NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, December 13, 2016

Almost 200,000 Kenyan households, many headed by poor, rural women, have lifted themselves out of poverty using mobile money services, experts said on Thursday, calling for the technology to be introduced in other developing countries.

The impact was most dramatic among single mothers who used M-Pesa, a text message-based mobile payment system, after switching from farming to business and retail sales, the journal Science found.

“What we saw over six years was impressive,” Tavneet Suri, associate professor of Applied Economics at the Massachusetts Institute of Technology, said in a statement.

“When M-Pesa came to an area, women shifted their occupations and their savings went up.”

The expansion of M-Pesa, which is used in virtually every Kenyan home, lifted 194,000 households – or two percent of households nationwide – above the poverty line in six years, the study found. It provides further evidence that mobile phone technology can help to bring financial services to the 80 percent of African women who do not have a bank account and bolster growth of the world’s poorest continent.